“The labour market remained on solid footing despite the 0.1% contraction in GDP in March as hiring activity remained high, with 2.1 million people starting a new job in the first quarter of the year.
“However, clouds are gathering on the UK’s economic outlook and with the cost of living crisis deepening, this could be the last strong month before we see a slowdown in the labour market, which tends to be a lagging indicator.”
“For the first time ever we’re seeing fewer unemployed people than job vacancies, with unemployment down to pre-pandemic levels of 3.8% - last seen in December 2019. Although growth has slowed, there’s still a record 1.3 million job vacancies to be filled in the UK adding further pressure on employers looking for workers.
“While today’s update shows hiring challenges still remain, record job to job moves in Q1 showed continued jobseeker confidence, and it’s encouraging to see the record flow from inactivity, which had been ticking up due to sickness, to employment, possibly driven by cost of living pressures.
“The tight labour market has pushed regular pay growth up to 4.2% - the highest growth rate since May 2008, outside of the pandemic period. Despite these record figures, in reality pay simply isn’t keeping up with inflation. Adjusted for CPIH inflation, regular pay has fallen 1.2% year on year, the biggest drop since November 2013.”
